Barry Diller Blasts TV Networks For Trying To Kill His Startup

IAC chairman Barry Diller blasted broadcasters in an
op-ed in The Wall Street Journal today, saying they threaten
the future of innovation on the Internet if they win their
Supreme Court case against live TV streaming startup Aereo.

Aereo is a service in a handful of U.S. cities that lets you
stream broadcast networks like ABC, NBC, CBS, and Fox over the
Internet for $8 per month. It also includes a virtual DVR service
so you can record shows online and stream them later.

Networks are suing Aereo, alleging that it violates copyright by
letting users access the networks over the Internet. The case
goes to the Supreme Court on April 22.

Diller, who is invested in Aereo through IAC, went over the same
case the startup has made since it was first sued by the
networks. He writes that Aereo provides each customer with his or
her own antenna to access broadcast signals that are free to the
public and then distributes the content through the Internet.

"It's not a piracy trick, as broadcasters have alleged, but
a genuine innovation that consumers should be able to choose,"
Diller writes, adding that if the Supreme Court sides with the
networks that it could chill future innovation on the
Internet.

If the broadcasters do win the case, Aereo doesn't have a
plan B. The company will have to shut down.

Diller says broadcasters are only suing Aereo to protect
the money they make from paid cable and satellite TV subscribers.
The networks get retransmission fees from cable and satellite
companies for content that is normally free over the air. They
also own a lot of premium channels, so it benefits them more if
people don't access their content for free over the Web or
antennas, even if they do so legally.

Diller writes:

The answer is obvious: Broadcasters make more money when
consumers are steered away from over-the-air program delivery and
toward cable and satellite systems that pay the broadcasters
retransmission fees. There's nothing wrong with that. But it
seems rich for them to forget the agreement they made to provide
television to the consumer in return for the spectrum that
enables their business.

When broadcast TV first started, the networks made a deal
with the government that they'd be able to use the wireless
spectrum necessary for TV only if they provided the content for
free. That's allowed millions of people access to free
information and entertainment.

Some network executives like CBS CEO Leslie Moonves have
threatened to take their programming to cable and satellite only
if they lose the case against Aereo.